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US and Japan have accused EU of of reneging on the1996 Information Technology Agreement by imposing tariffs on some IT products.

Both countries have formally lodged a complaint with World Trade Organization (WTO) against EU tariffs.

All three are signatory to the Ministerial Declaration on Trade in Information Technology Products (ITA) that was held in Singapore in December 1996. The ITA provides for participants to completely eliminate duties on IT products covered by the Agreement. Developing country participants have been granted extended periods for some products.

The dispute involves web-enabled set-top boxes, flat-panel LCD monitors and multifunction printer, scanner and fax devices on which EU has been imposing tariffs between six and 14 per cent for the past 20 months. These product groups were estimated to have been worth $70bn in export sales in 2007.

EU view point is that because these are consumer products, they are not covered by the ITA.

The Office of the US Trade Representative has stated that there is no such exemption and EU is violating the ITA.

According to US Trade Representative Susan C Schwab:

It is critical that the European Union lives up to its ITA obligations instead of imposing new taxes and duties on innovative technologies. The EU should be working with the US to promote new technologies, not finding protectionist gimmicks to apply new duties to these products.

To solve this dispute WTO will now launch formal consultation with the US, Japan and EU which must be completed with in 60 days. After that US and Japan can move to have the WTO rule against the EU tariffs.